Good morning, and welcome to the RE/MAX Holdings Third Quarter 2022 Earnings Conference Call and Webcast. My name is Chris, and I will be facilitating the audio portion of today's call. At this time, I'd like to turn the call over to Andy Schulz, Senior Vice President of Investor Relations. Mr. Schulz? Thank you, operator. Good morning, everyone, and welcome to RE/MAX Holdings Third Quarter 2022 Earnings Conference C all. Please visit the investor relations section at www.remaxholdings.com for all earnings-related materials and to access the live webcast and the replay of the call today. If you are participating through the webcast, please note that you will need to advance the slides as we move through the presentation. Turning to slide two, our prepared remarks and the answers to your questions on today's call may contain forward-looking statements. Forward-looking statements include those related to agent count, franchise sales, financial measures and outlook, brand expansion, competition, technology, housing and mortgage market conditions, capital allocation, dividends, share repurchases, strategic and operational plans, and business models. Forward-looking statements represent management's current estimates, and RE/MAX Holdings assumes no obligation to update any forward-looking statements in the future. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those projected in forward-looking statements. These are discussed in our third quarter 2022 financial results press release and other SEC filings. Also, we will refer to certain non-GAAP measures on today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our website. Joining me on our call today are Steve Joyce, our Chief Executive Officer, Karri Callahan, our Chief Financial Officer, and the presidents and CEOs of our brands, Nick Bailey and Ward Morrison. With that, I'd like to turn the call over to RE/MAX Holdings CEO, Steve Joyce. Steve? Thank you, Andy, and thanks to everyone for joining our call today. Looking at slide three, during the third quarter, we performed well in the face of increasingly difficult market conditions. Our results once again reflect the strength and resilience of our differentiated business model. Some of our notable quarterly highlights include RE/MAX Holdings' total revenue was $88.9 million, down only 2% compared to last year as our INTEGRA acquisition and growing mortgage business helped offset the impact from the softening housing market. We generated adjusted EBITDA of $31.5 million, and our adjusted EBITDA margin was a robust 35.4%. Adjusted EPS was $0.56. We accelerated our stock buyback program and repurchased over half a million shares during the quarter. Total RE/MAX agent growth grew by over 3,000 agents to 144,000 agents in total, a new record. As the Motto Mortgage presence continued to grow with an increase in the open office count during the quarter, our wemlo loan processing business increased as well. We are pleased with our third quarter results, particularly given current market conditions. During times like these, our 100% franchised model, unique in our space, is a key competitive advantage and serves us well. Recurring revenue from dues and fees based on agent count and open Motto offices accounted for almost 65% of our revenue, excluding the marketing funds during the third quarter. Combined with an asset-light business, we have a relatively low cost structure that allows for robust adjusted EBITDA margins and strong conversion to Adjusted Free Cash Flow. Since our IPO nine years ago, we have consistently converted between approximately 55%-75% of our adjusted EBITDA to Adjusted Free Cash Flow. This enables us to generously return capital to shareholders while also strategically reinvesting in our business. Since going public, we have paid out more than $125 million in dividends to our Class A stockholders, and we are now almost one quarter of the way through our $100 million stock buyback plan, which we commenced in January this year. We also aggressively pursued buying back our RE/MAX independent regions, which we think has been an excellent allocation of capital and driver of value. In particular, our INTEGRA acquisition continues to perform well and deliver an increasingly handsome return. Our expanding mortgage business has helped further diversify our revenue streams and provided additional and exciting avenues of growth. We continue to execute at full speed on the strategic growth initiatives we announced at the beginning of the quarter. Frankly, it feels good to be playing offense while so many others in our space are taking a more defensive stance. We believe we are in a very desirable position as we approach the next phase of the housing cycle. We have a lot of options, and we intend to be strategic and opportunistic. One final note, the board and I have met recently, and we agree that I should remain as CEO on an interim basis through the second quarter of next year when we expect to start a formal search for a permanent replacement. With that, I'll turn it over to Nick. Thank you, Steve, and good morning, everyone. Moving to slide four, as is typical for this time of year, September home sales declined 9.7% from August, according to the most recent RE/MAX national housing report. Across the 53 metro areas surveyed in the report, inventory climbed to two months supply for the first time in about two years. During that period, quick sales kept the housing market relatively bare. Now with the supply of two months, there are a lot more options for home buyers. The trend also suggests some progress toward more balance in the market. For a long time, six months of inventory was the standard for a balanced market that favored buyers and sellers evenly. Now, with the evolution of technology and various changes in home buying patterns, the new standard is becoming four months, and we're halfway there. Additional good news for home buyers, September's median sales price of $400,000 was 6.1% lower than the year high of $426,000 in June and 1.2% below August, though it was 6.7% above September 2021. The Fed's move to cool inflation are clearly having an effect on the housing market. The historic pace and magnitude of the interest rate increases have created a reset and softening of the housing landscape as intended. We believe, however, the demand is still high based on generational factors. So in terms of annual sales, even a slower market will still stay in the historic range of results. After all, it's important to view things in context. At nearly 6.9 million sales of new and existing homes, 2021 was an uncommonly strong year. Without that context, the year-over-year comparisons can make the current housing climate seem more dire than it really is. The fact is, 2022 is shaping up to be a pretty good year for home sales. Now, admittedly, I'm an optimist, so when I talk to people about the housing market, I implore them to take a deep breath and keep things into perspective. Interest rates go up and down, and recessions come and go, but no matter what, people are going to buy and sell homes. Based on our five decades of experience, it will happen millions of times every single year. People get married, they have kids, they get divorced, they move for jobs. That's not really the question. The key question, as you see on slide five, is which agents or brokerages are going to be the ones helping those consumers with their home sales and purchases. That's where our main competitive advantage comes in, the productivity of RE/MAX agents. Because no matter what other business models may be doing, and no matter what's happening in the economy, RE/MAX agents have a long track record of being ahead of the competition. As you can see in every kind of housing market over the past 12 years, RE/MAX agents in the U.S. have consistently outsold competing agents at large brokerages by a wide margin. From 2010 to 2021, U.S. housing experienced markets at both ends of the spectrum, and the number of U.S. home sales has gone up and down, as has the average transaction size per agent. RE/MAX agents have continued to outproduce the competition 2-to-1 at participating large brokerages, according to the RealTrends data. We also believe experience in navigating through changing markets will influence who will succeed in the next leg of the housing cycle. RE/MAX agents had nearly twice as much experience as the typical Realtor in 2021, an advantage that has widened in recent years. The median years of experience for U.S. RE/MAX agents was 15 last year, compared to just eight years for non-members. That means most of our agents have gone through market changes that many in the industry have not. That's one reason we're more confident and aggressive than many other brands right now. I don't believe there's enough downline profit share split or whatever to enable unproductive agents to stay in our industry long term when markets are changing as they are today. Looking at slide six, overall agent count increased over 3,000 agents year over year and reached a new high of more than 144,000 agents, underscored by continued growth in Canada and globally. In the U.S., we continue to see slightly depressed results driven primarily by the uncertain housing market. We expect to see a notable industry-wide contraction in the number of real estate agents across the U.S. In truth, that's not a bad thing from our perspective. While our model makes us more insulated than most, we are not immune. Our U.S. agent count will likely be under a bit of pressure for the foreseeable future. Increasing our U.S. agent count remains a top RE/MAX priority, and that's why we are so focused on the growth initiatives announced last quarter. These initiatives are all underway, and we are happy with our progress thus far. They should make a difference in our agent count, even if the impact isn't as clear as it would be in the absence of market headwinds. We expect the new programs for teams and conversions, mergers, and acquisitions to be even more impactful in our 2023 results. Part of this is due to the time it takes for people to make a move. These are big decisions for highly productive teams and brokerages, and it often takes months for someone to take the plunge and make a change. That's why it's so critical and advantageous to have put these initiatives in place when we did. Having our systems already up and going gives us great runway into the new year. Some teams and brokers have already come on board, and we're looking forward to many more joining us during the last part of 2022 and into 2023. Lastly, regarding our July announcement to launch MAX/Tech powered by kvCORE, we couldn't be more pleased with the response from our network. We launched the first phase of the rollout in Canada in September, and the initial work is progressing nicely. Even more telling, we've spent a good part of the past couple months on the road at our annual regional fall retreats across the U.S. and Canada, engaging with brokers and agents alike. The enthusiasm for this next step in our tech evolution has been off the charts, and it's not lost on our membership, and surely not on many of our competitors, that we are actively increasing our value proposition while others are cutting services. When the U.S. rollout begins in early 2023, that difference in approach should even be more apparent. With that, I'll turn it over to Ward. Thanks, Nick. Looking at slide seven, Motto continued to grow during the quarter, opening more offices and selling additional franchises. Likewise, wemlo's business expanded, posting its best quarter yet as measured by the number of loans processed. In an industry that has been hit particularly hard by rising interest rates, we are grateful to be in this position and talking to you today about our growth. That demonstrated ability to grow in virtually any kind of market is one of the many reasons we are bullish on our mortgage business and the broker channel in general. In fact, our mortgage brands continue to garner more attention and earn more accolades for their quality and for Motto, the unique opportunity offered to entrepreneurs. For example, Franchise Business Review, which has ranked Motto Mortgage as a top 200 franchise for four years running, also named Motto as a top recession-proof franchise based on an assessment of Motto's potential to outclass the competition during trying economic times. Another publication, Black Enterprise, recently named Motto a top 25 franchise for black entrepreneurs based on an analysis it completed using Franchise Business Review data. This top 25 list highlights franchisors with the highest owner satisfaction survey scores among participating black franchise owners. Also, wemlo was just named the Service Partner of the Year by the National Association of Mortgage Brokers at its 2022 recognition awards. Wemlo was the only processing company recognized in the compliance processing category for quality service and support of the mortgage broker channel. We believe the growth and success of our mortgage business is due to the unique and compelling value proposition each of our brands offer, and the fact that ancillary services like mortgage provide real estate entrepreneurs with opportunities for revenue and earnings diversification, something that is gonna be increasingly important in the face of shifting housing market conditions. About 70% of Motto sales have been to real estate professionals who are within close proximity to the real estate transactions, namely purchase originations. That proximity is the key to success for many of our franchisees. Looking ahead, our future is very bright as we expect our mortgage business to continue to expand. However, in the near term, growth is being muted by the challenged housing market, and this will likely remain the case until rates settle out. Also, we are in the process of enhancing and increasing our sales force. We are not yet at full capacity, and this too may impact our pace of sales as we finish out 2022 and start 2023. Consequently, our stated desire to sell 120 franchises next year no longer looks feasible. However, we expect to provide an update regarding our 2023 franchise sales expectations on our fourth quarter call next February. With that, I'd like to turn the call over to Karri. Thank you, Ward. Good morning, everyone. Moving to slide eight, third quarter revenue declined approximately 2% to $88.9 million. Excluding the marketing funds, revenue was just over $66 million, also a decrease of approximately 2% when compared to the same period last year. This decrease was driven by negative 4.9% organic growth and adverse foreign currency movements of 0.5%, partially offset by 3.2% acquisitive growth. All acquisitive growth came from last year's INTEGRA acquisition, which we closed on July 21st and continues to perform well. Organic growth decreased primarily due to lower broker fee revenue and an increase in recruiting incentives, partially offset by Motto growth and increased events-related revenue. Rising interest rates have adversely impacted housing affordability and weakened housing demand, resulting in fewer transactions and, by extension, lower broker fee revenue. Excluding broker fee and marketing fund revenue, our organic growth rate was flat. Looking at slide nine, our Q3 SO&A expenses decreased 2.7% to $49.7 million. Third quarter 2022 selling, operating, and administrative expenses decreased primarily due to acquisition-related expenses, lower personnel costs excluding restructuring charges, and reduced headcount, partially offset by restructuring charges, increased travel and events expenses, and higher legal expenses. Between our restructuring charge in the third quarter and the acquisition of INTEGRA in last year's Q3, there's a lot to unpack when comparing the two quarters, but we are happy to answer any questions you might have. Looking ahead, we expect our Q4 SO&A expenses will decrease sequentially from the third quarter and be between $39 million and $42 million. Moving to slide 10, before I get to our outlook, there are a couple of items I want to briefly mention. We accelerated our buyback activity during the third quarter, repurchasing just over 500,000 shares. Since the inception of our program in January, we have repurchased approximately 1 million shares in total, returning almost $24 million to shareholders in the process. We continue to believe that repurchasing our stock at its current valuation is an outstanding allocation of capital and creates value for our shareholders. Second, I want to call out the impact that today's increasing interest rate environment is expected to have on our earnings. Specifically, we believe rising interest rates will decrease our Adjusted EPS by approximately $0.10 year-over-year during Q4. That estimate includes the 75 basis point raised by the Fed that was announced earlier this week. In the current interest rate environment, we expect about a $0.03 Adjusted EPS degradation for each $1 million of additional interest expense. Now, onto our guidance. The company's fourth quarter and full-year 2022 outlook assumes no further currency movements, acquisitions, or divestitures. For the fourth quarter of 2022, we expect agent count to increase 1%-2% over fourth quarter of 2021, revenue in a range of $80 million-$85 million, including revenue from the marketing funds in a range of $21.5 million-$23.5 million, and adjusted EBITDA in a range of $23 million-$27 million. For the full year 2022, the company is reducing its guidance to reflect current housing market conditions and other related macroeconomic trends, and now expects agent count to increase 1%-2% over full year 2021, down from 1%-2.5%. Revenue in a range of $352 million-$357 million, including revenue from the marketing funds in a range of $90 million-$92 million, down from $354 million-$364 million. Adjusted EBITDA in a range of $118 million-$122 million, down from $123 million-$128 million. Now, I'll turn the call over to Steve for closing comments. Thanks, Karri. Looking at slide 11, we believe change brings opportunity, and the current economic climate is certainly defined by change. We have faced similar circumstances over the past five decades and performed well, and we believe we are positioned to do so again. With a scaled global business, unmatched brands, strong financials, and a proven track record of success, we think we are in an enviable position. Our strategic growth initiatives have us on our toes while others are on their heels. We look forward to finishing the year on a high note. With that, let's open it up for questions. At this time, I'd like to remind everyone, if you would like to ask a question, please press star then one on your telephone keypad. Our first question is from Anthony Paolone. Oh, my apologies. Our first question is from Stephen Sheldon with William Blair. Your line is open. Hey, thanks. Good morning. First, just as we think about modeling adjusted EBITDA for 2023, I mean, I know it's still a little bit of ways out, but just can you walk through some of the moving pieces with any visibility you have, especially as we think about the drag from tech initiatives, the profit trajectory of Motto? Just curious if your investment priorities changed at all here, where some of the cost savings from the discontinuation of booj could maybe flow through a little bit more next year, or does it still seem like most of that will be reinvested, I guess, in other priorities? Karri, why don't you start, then I'll chip in. Sounds good. Good morning, Stephen. Yeah, so great question. Obviously, we'll have a lot more to say about 2023 when we get to this call in February. Obviously, some uncertainty as we think about just the macro and what that means for the top line. You know, as we think about the cost structure, as we said back on the call last quarter, you know, we are expecting the announcements that we announced early in the third quarter to have about an $8 million annualized run rate benefit to EBITDA on a go-forward basis. Thinking about that, as it relates to spread, it's kind of ratable on a quarterly basis. You know, nothing has changed at all. We are very, you know, we're thinking very opportunistically and aggressively given our franchise model, and where we sit, and so are looking to continue to invest in that, reinvest those dollars back into the business. That reinvestment will come both in terms of additional personnel, primarily supporting the mortgage business, and then also in terms of, you know, some revenue relief as we announce some of the mergers, conversions, and acquisition initiatives, as well as the teams initiative. We'll ramp that investment. It'll be a little bit less of an investment in the first half of 2022, or 2023, I'm sorry, and then, you know, that'll scale in the back half. As we think about the, you specifically mentioned the Motto side. You know, we still think it's a prime time to be investing in the mortgage business. It's contributing still to our organic growth. We're kind of looking at that break even pushing out maybe a little bit into early 2024 now. Yeah. I think the wild card for us that we're carefully watching as everybody else is we believe the investments we're making will actually help us both on the agent acquisition side through teams and through acquisitions, and then on the Motto side. The only question that we've got to come to conclusion on as we budget and we plan for the year is how much of that is going to be offset by the conditions in the market? Got it. That's all very helpful. Maybe just as a follow-up. You know, on the effort to attract larger teams, I think you have some pilot markets that maybe you rolled out in August. I guess what early traction or conversations, pipeline building have you seen there? How long do you think it could take for those efforts to be rolled out more broadly and to have a more material impact and help maybe stabilize the agent growth in the US market? Nick, why don't you take that? Sure. For both teams and conversions, they are early initiatives for us, but we're very pleased with both, and we have success in both thus far. Teams just launched August first. Though it's too early to give specifics, we know that building a pipeline does take a little bit of time for both, but we can report thus far success in both categories. We'll have more information as we round up end of year. Great. Thank you. The next question is from Anthony Paolone with JP Morgan. Your line is open. Great. Thank you. Good morning. My first question is, can you talk to any concessions you might be making right now for agents or franchisees as the markets deteriorated, and maybe contrast that with, y ou know, perhaps what you've done in the prior housing downturn. Just trying to understand as we look to 2023, if there's, you know, any headwinds we should expect there as you accommodate sort of a tougher market. Yeah. I'll ask Nick to answer this more fully. Where we are putting either investment dollars or fee breaks is in the acquisition of additional agents, not to save at this point. Nick, why don't you talk a little bit about the activity we've got going on and where we think this might go in past performance? Sure. We don't have any current incentives on an individual per agent basis. As Steve mentioned, it's just investment in the initiatives that we have. Unlike quarters in the past where we have had initiatives or incentives, we don't have any right now, and we don't anticipate any of those in the coming quarters. Okay. Just the follow-up I have is with regards to capital priorities. Can you talk about just how you're thinking about, you know, buyback versus the dividend versus debt pay down? Yeah. Clearly, our primary capital allocation is always going to be to return to shareholders. We've been relatively aggressive this year on share repurchase. We have held the dividend to the point we've you know if you look at our actual distribution of free cash flow, it's $50 million out of $54 million. And so that I think you can expect us to continue to evaluate the market to the extent we still see a significant dislocation between intrinsic value and price. We will continue to invest in the stock, and we will continue to hold the dividend and look for opportunity to increase it over time. The other thing is that, you know, with the dislocation in the environment, we actually think it's an opportunity potentially for opportunistic investment in the mortgage business and potentially other acquisition targets depending on circumstance. You can expect us to continue to evaluate the opportunities we see available. Hopefully, we believe the environment could provide opportunity for us to look at some interesting other investment opportunities. Okay. Thank you. The next question is from Tommy McJoynt with KBW. Your line is open. Hey, good morning, guys. Thanks for taking my questions. Good morning. I actually can't recall such a wide range of estimates from the industry on U.S. existing home sales, looking forward. I mean, you know, MBA and Freddie and NAR have it around 5 million, and Fannie has it below 4 million. You guys have a very wide representative national footprint. What's your house view on the industry existing home sales for next year? Well, I'm completely confused, so Nick, why don't you answer that? Thanks, Steve. You're exactly right. It is pretty wide. I think the challenge is everyone's doing a year-over-year comparison to a year that was a complete anomaly. We have to reflect back, I would say moreover, say a 10-year period of time where we've averaged around 5 million sales, give or take. I am very optimistic about, especially the five-eight years ahead in this market is we still have a shortage of around 4-4.5 million homes in the U.S., and we've got millennials at the ages of 25-42, at the prime of their purchasing. We've got Zs as big as the millennial population right behind them that are stepping into home buying. I truly believe that in the years ahead, we've got tremendous demand, and we still have a shortage of inventory. It's somewhat similar in Canada, especially with their three-year immigration plan to bring double the number of folks into the country to help with labor that they have in the past few years. I think when we step back and look at it's probably just a little bit more of our 50-year history and seven recessions and experience on this to say we've seen some changes and it's not just a one-year comparison. Generationally, we are pretty optimistic on what's to ahead. We're gonna have to bump through rates and economy and let things settle out. There'll be some pressure on overall agent count just in the National Association of Realtors, which our business model obviously shows its strength in times like this. We're not totally immune to it. It does show our strength and something that we'll leverage moving forward. Got it. Thanks, Nick. You touched on Canada there. Can you remind us the various revenue and earnings contribution from Canada, specifically? Your expectations for, it seems like Canada's slowdown is a bit more sharp than what we're seeing in the U.S. Karri and Nick, why don't you chip in on that? Sure. You know, Canada continues to be a really bright spot for us. Our INTEGRA acquisition last year continues to outperform expectations. From a top-line perspective, you know, kind of looking high teens in terms of revenue contributions in terms of the Canadian operations. One thing that I think is important to realize, we've continued to see growth in terms of agent count growth in Canada. Those Canadian agents are still contributing about $.80 on the dollar into our top line now, since we have the vast majority of agents within our company-owned region umbrella. Canada continues to be a very bright spot for us and are continuing to leverage a lot of growth initiatives and opportunity despite the strong market share that we have there. The only thing I'd add to Karri's comments there is when you look at total agent count, you have about 140,000 agents across Canada. We account for over 25,000 of those. We're 17%-18% of the total agent count with number one market share by a strong margin. That gives us a lot of strength to help continue to drive the growth across that country. Where do we compare in the U.S., you know, 1.5 million realtors compared to our total numbers, we represent about 4%. We think that plays into the Canadian growth as well. That makes sense. Thank you. The next question is from John Campbell with Stephens. Your line is open. Hey, guys. Good morning. Good morning. Good morning. Hey, we've obviously seen and heard from a lot of folks in the channel just about the negative impact of lower end or, I guess, less productive agents on the total agent count, but basically a big step up in attrition from that lower end cohort. Clearly, you guys have some of the industry's most productive agents, so I'm thinking that's probably less of an issue for you guys, but I'm curious about any color you might provide there. Yeah. I think, you know, we have, for the most part, tremendously productive agents, so kind of at a 2-to-1 average margin. You know, there's too many agents out there now. There's clearly gonna be a drop-off for the less productive agents because they're not gonna be able to make a living doing it or even incremental revenue to offset their costs. We expect to see a lot of that drop-off. We may see a little of it, but we actually expect that to be offset in some part by all the other activities we're doing. We actually also see it as somewhat of an opportunity as agents that are concerned about the brand they're with or the, you know, their affiliations and whether or not they could do better with a stronger brand. We see that somewhat as an opportunity. Nick, you wanna add to that? Yeah. I think something that's important, we talk about conversions, for example, when we look at the pipeline, this is a time when we're seeing people look for more competitive advantages and value. I think the reality is in the last couple of years, we've seen a lot of agents and a lot of new brokerages come to the industry, but they were somewhat artificially upheld by the strengths of the market. Now it's really putting pressure on what's the true value. We're seeing the competitive landscape is cut, cut everything, where historically, where we've been through these things before, the Great Recession, not a comparison to right now, but in comparison to how quickly the dynamics in the market changed and how we can respond, and agents have been through it. Our average agent is around 15 years experience, where the industry average is around eight. When you have double the experience, you've seen some of the other sides of this. This is where we really think that the brand and the RE/MAX agent shines because they know how to control their costs and what to do to capture more buyers and sellers at a time when this is a brand-new market for some people that have only been licensed two years. Okay. That makes sense. This kind of dovetails into the next question. It seems to run maybe a little bit contrary to what you said earlier, Nick. You know, you mentioned that, you know, the U.S. agents, you're expecting that to remain under pressure for the foreseeable future. Just wanna dig back in on that comment. You guys have, you know, clearly ramped up the recruiting incentives. You made a, you know, obviously a strategic focus to grow agents. Can you explain a little bit about why you don't think you'll be able to battle through the kinda ongoing in-market headwinds? Why we will be able to? It sounds like you, the comment you made earlier about, you know, expecting pressure on the U.S. agent count over the foreseeable future. I just wanna make sure I heard that correctly. Yeah. Yeah. To clarify that, when I look at just, there's gonna be overall pressure on total number of agents in the business. Even though we talk about how our years of experience, we rely on that, and that'll be something that will help not only our brand, brokerage, and business model, and our agents and brokerages go through a changing market, but we're not totally immune to it. I mean, we have agents that have joined brokerages or joined teams that have also been licensed just a couple of years. There will be some pressure on some of our agents, and we realize that. When we look at, for example, what we're doing with teams and strategic initiatives, this is a time when you maybe have individual agents that now start struggling on their own, and they may wanna join a team. You can see teams start to expand and pull people in within their teams. On the conversion side, the industry consultants that do the valuations for most brokerages throughout the U.S. and Canada, their words, not mine. This is the biggest largest number of valuation requests that they've seen in their forty-year history. That is part of the reason that we looked at the conversions and mergers, acquisitions opportunity, and our pipeline's extremely full on it because there are a lot of folks, and it's in high demand. While there will be some pressure on some of our agents in some markets, we're hoping to make up for that with the opportunity and demand on acquiring companies and recruiting 10, 20, 50, 100 at a time versus one at a time. Okay. That makes sense. Thanks for the clarification. The next question is from Ryan McKeveny with Zelman & Associates. Your line is open. Hey, good morning, and nice job on the quarter. Ward, so on Motto, I wanted to ask, so it sounds like the new franchise sales targets might adjust, but if we just look at the trend in open Mottos, obviously looks pretty compelling. I think it was 200 last quarter, 211 this quarter, 217 as of October. A nice ramp there. I guess I'm curious, is the macro environment driving any acceleration in that timeline from kind of sale to open Motto offices? Or is that more just, you know, the natural progression of how these should kinda transition to open offices? Anything there would be helpful. Yeah. I think the biggest thing recently, we have invested in some recruiting liaison in our particular sector, so we're trying to support our owners in finding their first qualified individual that helps them get open. We've already seen some increase in the speed of that. We see the positive effect of that and may invest more in that particular area as we get past the first few that we've been able to speed up this particular process. We think there's opportunity there. Also the states, they come and go on the speed of their ability to get somebody licensed, and we've seen that with the change in the industry. They're a little bit less busy, so they're able to look at some of our applicants quicker. We view that as a potential upside as well. Recruiting efforts and the licensing all are improving, and we hope that continues to make open offices happen a little bit quicker. That's great. Thank you. I think strangely enough, the conditions we think we're under now and next year actually are probably favorable to us in terms of growing that business. That's great. Karri, one follow-up or clarification. Just wanted to square a couple comments. You mentioned for 4Q SO&A, I think $39 million-$42 million. Then on the comment about the kinda run rate EBITDA benefit of $8 million or seemingly $2 million a quarter, is that effectively saying, you know, kinda take the SO&A from 4Q and assume that drops down by $2 million a quarter going forward? Or is there kind of a different flow through to the EBITDA benefit of the cost savings? Any help you can provide there? Sure. I think a couple things to keep in mind. We're really looking at reinvesting that $2 million back into the business, right? That's just gonna ramp over the course of the year, so it's not necessarily gonna come down. We're just reinvesting it back into the initiative. The other thing to keep in mind, just with regards to seasonality, is keep in mind that our first quarter SO&A is just unseasonably high because of our annual agent conference. This year is the 50th anniversary. We're very excited and have a lot of things to celebrate, so wouldn't be surprised if that SO&A is even a little bit higher than it's been in the past, offset by additional revenue because of additional participation. Kinda Q1, if you're looking at Q1, I think you're probably more of a consistent performance in 2023 as 2022, just because of some of that seasonality. Obviously, we'll have more to say in February as we get into a full 2023 outlook. Got it. Very helpful. Okay, thank you. The next question is from Ronald Kamdem with Morgan Stanley. Your line is open. Hey, a couple quick ones. Just, one, just going back to the question on competition, in the industry. Just hoping you can sort of contextualize what the competition for agents is today versus three, four, five years ago. You know, whether it's some of the, you know, the recruiting fees or anything, just trying to get a sense of how do we put that into context, today? Thanks. Yeah. I think and I'll ask Nick to give a more full answer. I think partly what we're seeing is a lot of the incentives that were going out to bring agents in and had some success. Our sense is that that may be lessening somewhat, so our timing may be good in terms of our strategies to bring more agents in. Obviously, you know, company by company, the people are faring better or worse as their model dictates. Our model obviously allows us to be very stable in terms of our cash flow and our resources to invest. So we believe, you know, that again, like Motto, the timing is probably good for us to push on these two initiatives that Nick is overseeing. That we'll see over time, you know, whether or not the relative weakness of the market drives that opportunity to be greater than we were even hoping. Nick, you wanna add to that? Yeah. I would say that I think the competitive landscape from a few years ago, we saw a really high number of models and companies come in that were transaction or very low cost discount type of models. When we see the market contract somewhat, there's only so much that the brokerage can give away, if you will. Where we see agents and brokerages start to turn is relying more on productivity. Agents over the last couple of years, many of them, even several new to the business, were somewhat order takers. The business was just flying off the shelves in certain ways. Now it becomes more about how do I find a client, how do I get another closing, versus how do I save $25 a month? That's where our productivity shines through. Great. Just going back to the sort of the guidance reduction. You know, I think we're really interested to see sort of what assumptions really change on the macro side. I mean, clearly you guys have a view of, you know, maybe internally of what home sales or home prices are going to do. Just sort of curious how those sort of pieces changed and moved that led to maybe some of the guidance reductions. Thanks. Karri? Sure. When we look at the guidance reductions, primarily the impact was coming from the top line and is primarily macro-driven. When we look at the adjustments that we made, the biggest contributor was broker fee. A little bit of headwind coming from our continuing franchise fees. The other thing that's having an impact is just the strengthening dollar, because of the increased contributions from Canada. That's really the drivers that impacted the reduction that then kind of fell through to the bottom line. Great. The last one, if I may. I'm just looking at the operating cash flows of $61 million year to date. You know, which just wondering if that's a good. You know, obviously things are slowing down a little bit, but is there anything sort of timing or anything related to that? Or is that sort of a good run rate number that we should be thinking about? Thanks. Yeah, there's nothing that's unusual this quarter really from a point of consequence from a cash flow perspective. You know, we look at it a lot in terms of the strength of our business model, kind of the hallmark nature of the franchise model and our ability to consistently convert our adjusted EBITDA into Adjusted Free Cash Flow. That's kind of been in the, you know, 60%-70% range. Interest expense is having a little bit of an impact on us, and so do expect that to maybe come down a little bit over in the future, just as interest rates rise. The strength of the business model really shines in an environment like this. There's nothing else that's too unusual as it relates to cash flow performance in the quarter. Thank you. The next question is from Jason Stewart with JonesTrading. Your line is open. Hey, guys, it's Matthew on for Jason. Could you talk a little bit about the restructuring and impairment charge, if you haven't already, and what we should expect there going forward? Karri? The restructuring charge was directly tied to the announcements that we made in early July, and the shift in our technology strategy that resulted in a reduction in force. That's a one-time event, approximately $7 million, primarily severance-related. Then we had some asset write-offs as well. That's a one-time event. Don't expect that to recur in the future. Then that impairment that you see on the face of the income statement has to do with some things that we're doing with our corporate headquarters in terms of just trying to optimize our space. Again, that's a one-time event. We don't expect to see that happen again going forward. Thanks. How much do transactions and lower transaction volumes affect the broker fees? Karri? Sure. Obviously, you know, broker fee, we look at it in terms of a number of different contributions. Obviously, the number of transactions, home price, and then agent count are all factors. You know, it is the variable part of our business and the part that is most tied to the end market. When the end market is under pressure, you know, that's the line item that's gonna be most impacted. Just, I think just to keep in mind, you know, our business model is fundamentally different. It is only 1% of the commissions. Obviously we're more insulated than many others, but we're not immune to what's happening in the macro from that perspective. Gotcha. Thank you, guys. Our final question today is from Justin Ages with Berenberg Capital Markets. Your line is open. Hi. Thanks for taking the question. I was hoping we could discuss the organic revenue comment. I believe you said it was flat without the decrease in broker fees. Can you just give us a little more detail on this aspect of it that are contributing it to be flat? I would have thought, you know, the decline in U.S. agents would have had an outsized impact, but is that being offset by kind of Canada, international, and mortgage growth? Karri? Sure. You're exactly right, Justin. You know, I think when we look at the business right now, we, you know, despite the environment, we're optimistic because we do have some differentiation and some diversification with the mortgage business. That was about a point organic growth. Canada continued to grow. Global continued to grow, as you noted. That really did offset some of the US agent count. Some of the investments that we're making in particular in the pilot states as it relates to teams, which we think are very prudent and opportunistic investments as we think about positioning ourselves for growth in the future. All right. That's very helpful. Thank you. Next, on capital allocation, I know you mentioned preference right now for buying back shares given how attractive they are from a valuation standpoint. Is there more kind of focus on looking at buying some more of the independent regions given that their valuation might be a little depressed given the current housing market conditions? Yeah. We're looking at that all the time. We think that's an actually excellent allocation of our capital as well. That is sort of opportunistic obviously. At any point in time, we're in dialogue with the remaining independents as to whether or not there's possibility for a transaction. Don't be surprised if you see us do more of that within the next year or so. All right. Perfect. Thanks so much for taking the questions. We have no further questions at this time. I'll turn it over to the presenters for any closing remarks. Thank you, operator, and thanks to everyone for joining our call today. That concludes the call. Have a great weekend. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.